Q&A with Ben Alden of Betterment

You've been at Betterment since 2014. How many employees did Betterment have when you joined, and how many are there today? Can you talk about how the company has transformed in the past 5 years?

I joined Betterment at around 50 employees, and we’ve grown to over 260 today. Betterment is the leading independent digital adviser, helping our clients do what’s best for their money so they can live better.

Ever since I started, it feels like we’ve changed as a company every six months. We’ve grown from managing about $500 million in assets in a single line of business in 2014 to over $17 billion today across three lines of business. We’ve grown from a team of young, hard-working jacks-of-all trades to more experienced specialists working within the established processes and infrastructure we’ve built over the years. And this has been a great thing, because we work in a very regulated environment in the investment management space (the SEC and FINRA are our main regulators), and maintaining the trust of our clients and regulators is critical to our mission and our success.

When I started, there was very little regulatory scrutiny on digital advice because the space was in its infancy. We and our competitors were small, and while the regulators knew we existed, we were a tiny portion of the investing space. As we grew and as large financial services providers began to build competing services, that changed dramatically. From regular audits to interesting issues of first impression, we are operating in a different environment, where everything is subject to near real-time scrutiny. As a result, our legal and compliance teams are formally involved in the product-building process, to help guide the team safely through the thicket of financial regulation. Our legal and compliance teams have grown to 10 lawyers today and we’re hiring if you’re interested. ;)

But throughout all this change, Betterment has held fast to its mission. Although our technological innovations have been considerable, the founding team’s most impactful innovation was building a financial services company that puts its clients first.

In addition to your GC duties, last year you became the GM of Betterment for Business. Tell us a bit about your dual business and legal role and any challenges it's created for you. 

One of the things I like best about Betterment is that I’ve been given lots of opportunities to grow and learn. It’s one of the amazing things about working at a company that’s growing so fast.

Betterment for Business provides 401(k) plans to great companies (let me know if interested!). As GM, I oversee our strategy, distribution, product, and operations teams, and generally do what I can to make sure the team has what it needs to succeed. I’m so proud of what we’re building in this space, and it’s been humbling to learn so much about different teams and how they operate. 

I am able to do both roles because we have great leaders heading up the efforts across legal, compliance, and Betterment for Business. The challenge, however, is being mindful of my role as I switch from one context (GC) to another (GM). On any given day, I may go from a meeting about how a new product interacts with FINRA regulations to a conversation about B2B brand marketing, to a meeting about our product roadmap, to an interview for a sales representative. To avoid conflicts (and to protect privilege), I’ve also asked the legal team to not treat me as a lawyer when I’m working on Betterment For Business matters, which means I often get a be a client of my own team! In a way, this has helped me grow both as a lawyer and as a business person, because I get to see the company from the perspective of each. 

It’s been an amazing experience, and I think getting this business experience will make me better in my GC role--I’m certainly more understanding of business needs and desires!

How has the legal team evolved over the past 5 years?

A little over five years ago, there really wasn’t a dedicated legal team at Betterment. But we’ve always had wonderful lawyers--including a co-founder--who have been deeply engaged in building and working on our regulated entities (an investment adviser and broker-dealer). 

I was originally hired as an operations manager and legal counsel. The legal team started when I realized we had operations covered, but didn’t have a legal department per se. It started like most of these departments do, with me covering a large area of ground and trying to understand the needs of the business. As I learned more, I realized we would need to proactively build our legal and compliance teams as part of responsibly managing growth in a regulated space.

Over time, the team grew to cover two major areas: (1) product and regulatory counseling; and (2) corporate/commercial work. The latter covers what you might see at a tech company at our size and stage of growth. The former is more specific to Betterment, and exists to guide our product, design, and engineering teams through financial regulation, to accelerate our product development and make it safer. 

We also have an excellent dedicated compliance team of lawyers to help us build and operate our regulated entities. At first, the legal and compliance teams were essentially one team, with people wearing multiple hats. As we’ve grown we’ve specialized more and expanded the compliance team. I really enjoy this part of the job, because I’ve come to view compliance as the operationalization of law.  

Betterment operates in a heavily regulated environment. Which regulators oversee your business and how have you navigated them?

Our primary regulators are the SEC, FINRA, and the DOL. But there are many other regulators we might interact with on a regular basis, including state securities regulators. 

We do our best to work constructively and proactively with our regulators, which we’ve learned helps all parties get what they need faster. We do this as they touch Betterment directly through exams and outreach, but also through advocacy and industry groups. We formed a digital adviser industry group and have found that to be a great way to discuss broader industry issues. 

For the most part, our regulators want similar things as we do: clients invested safely in accordance with their needs. So when we do right by our clients, we tend to be doing right by the rules and our regulators as well. Our legal and compliance teams reflect and believe deeply in this, and we view ourselves as builders--just like the business--which makes being a lawyer at Betterment fun and interesting. 

We both started our careers as litigators—how do you think that background’s helped you as a GC? Do you have advice for litigators who’ve heard that going in-house is better suited for transactional lawyers?

I am a big believer that litigators make great in-house lawyers at tech companies, especially younger and regulated tech companies. Someone once told me that of the Fortune 500 GCs, about half are former litigators. I’d love to find that statistic somewhere...

The job of a litigator, abstracted, is to take a client’s problem, figure out all the law that governs the issue, uncover the facts from all sources, mold the facts and law into a narrative that’s convincing to extremely sophisticated parties (judges, arbitrators, etc.), all while another smart lawyer is gunning for your work, and maybe you. You have to be a strong advocate, good on your feet and in writing, and you have to be flexible to adjust to the varied and changing cases, rules, regulations, courts, etc., you face on a regular basis. Most importantly, you have to be excellent at issue spotting. All of these are very useful skills at a tech company, especially in a regulated one, especially as the regulated field itself is developing.

This doesn’t mean I think litigators can or should do anything and everything, just that I think the cliche that litigators don’t go into in-house roles isn’t accurate or good advice. 

For litigators looking to go in-house, I’d recommend you look for regulated tech companies--even if you don’t have experience in the specific field--or tech companies that are early on, when your issue spotting abilities are critical.